The US said it was halting sanctions waivers on Iranian crude exports. This drove Brent prices to a five-month high.

Though oil prices didn't change much on a weekly closing basis, a steep price fluctuation took place during the week.

Global refining margins fell across the board last week, mostly driven by weak middle distillates margins, though gasoline margins have remained relatively firm ahead of the high demand season in summer.

Last week started with a major bullish sentiment in the oil market, after the US said it was halting sanctions waivers on Iranian crude exports. This drove Brent prices to a five-month high, touching $75 per barrel, although they dropped by the end of the week to $72.15.

Though oil prices didn't change much on a weekly closing basis, a steep price fluctuation took place during the week.

Prices fell sharply at the end of the week on speculation that some Iran crude oil exports may be able to find customers regardless of the end to sanctions waivers. Also, global refining margins fell across the board last week, mostly driven by weak middle distillates margins (diesel and jet fuel), though gasoline margins have remained relatively firm ahead of the high demand season in summer.

Most of the supply distributions have been attributed lately to geopolitical factors; however, some other technical factors have emerged after Europe refineries stopped processing Urals crude from Russia after they found contamination in oil delivered via the Druzhba pipeline.

It was surprising that the supply outage of Russian Urals crude oil flows to Germany and Poland didn't cause an upward momentum in oil prices, especially given that the global market is already short of supplies of similar crude grades.

Urals crude oil is close in quality to the sour crude produced in the Arabian Gulf. It accounts for most of the Russian crude exports in eastern and central Europe, and almost half of Russia's total crude oil exports globally.

The contamination came at a time when European refiners are already questioning Urals quality, especially the sulfur levels.

It's unclear whether the concerns will affect Russia's future market share, and hence, the global supply and demand balance. Likewise, it is not yet clear how long the issue will last, given that Reuters reported it could have legal effects, as buyers in Europe could open lawsuits against Russian suppliers.

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